Center on Assets, Education, and Inclusion

This paper examines the progression of savings between adolescence and young adulthood. Using data from the Panel Study of Income Dynamics, we ask whether adolescents with a savings account and parents who have assets significantly predict having a savings account and the amount saved in young adulthood. Descriptive statistics reveal that adolescents have savings accounts more often when they are White, employed, and live in households where the head is married, has more education, and owns assets. Propensity score analyses provide evidence confirming that adolescents with savings accounts are more likely to have savings accounts as young adults. There is some evidence to suggest that adolescents whose parents have savings on their behalf and higher net worth are more likely to have more saved as young adults. Findings suggest that parents may play an important role in modeling saving habits to adolescents. Furthermore, if our findings regarding adolescents’ savings accounts are confirmed in future research, this study suggests that having a savings account in adolescence may lead to an increased likelihood of having a savings account in young adulthood.